20051005 Hwang DBS Daily Focus

Highlights
>
> UMW Holdings - Progressing towards the forefront - Maintain Buy
>
> The key takeaways from our recent Corporate Day in Hong Kong include the
> expectations of better performance to be recorded by UMW's automotive and
> oil and gas (O&G) divisions. Given its net cash reserves of RM1bn
> (c.RM2.00/share) and limited capital expenditure, UMW is expected to
> maintain its generous dividend payment with a minimum yield of 4%. We
> maintain our Buy recommendation with RM6.50 price target based on 13x FY06
> PER.
>
> 
>
> Comments
>
> WCT Engineering - Work on the Kota Kinabalu International Airport to begin
> next year - Maintain Buy
>
> Sabah Chief Minister Datuk Seri Musa Aman said that work to make the Kota
> Kinabalu International Airport (KKIA) a low-cost carrier hub will begin
> early next year. This would be part of the RM700m KKIA expansion project
> that will involve 1) tripling the main terminal from 25,000sqm to 79,000
> sqm; 2) extend the runway from 2,988m to 3,780m; and 3) land reclamation.
> Preliminary work including the reclamation of 20ha of sea adjacent to the
> existing runway has begun.
>
> Given the recent absence of local major contracts, there will likely be
> stiff competition for this project. In July, The Edge reported that WCT is
> tipped to undertake a major portion of the upgrading works for the
> project. WCT's experience with recent projects in East Malaysia - Bakun
> dam and the Kudat water supply - may help strengthen their bid. We
> maintain our Buy recommendation on WCT with a RNAV-based RM4.60 price
> target.
>
> Sime Darby - Sime Darby in bids to acquire Thai power assets - Maintain
> Fully Valued
>
> The Edgedaily reported that Sime Darby is reputedly one of several power
> firms interested to acquire National Power Supply Co Ltd, affiliate of
> Thailand's second-largest pulp and paper producer, Advance Agro PCL. The
> other companies interested in acquiring the assets include Japanese
> trading house Marubeni Corp and Britain's International Power. It was
> further reported that the Thai company has short-listed 4 companies and
> due diligence is being carried out.
>
> Total generating capacity of the assets being sold amount to 328 megawatts
> and are jointly owned by a company run by Thailand's Soon Hua Seng family
> that controls Advance Agro with the other owner being another affiliate of
> Advance Agro, Advance Power Supply Public Co Ltd. National Power supplies
> a large part of its output to a paper mill with the remaining to state
> utility Electricity Generating Authority of Thailand under a long term
> contract, sources were quoted as saying. There may be concentration risks
> involved due to National Power's heavy exposure to the paper mill. One
> source estimated National Power Supply to carry a value of RM565m. The
> objective of the sale is to raise capital for Soon Hua Seng to focus on
> its core business that includes pulp and paper production.
>
> Meanwhile, we are maintaining our Fully Valued call and RNAV-based RM6.40
> target as the relatively small quantum of the acquisition should it
> materialise would have minimal impact on Sime's earnings. In addition, we
> are maintaining our view that earnings growth of Sime for FY06 will remain
> subdued.